Involvement in work to develop the United Nations' Framework Convention on Climate Change (UNFCCC) with
cost effective mechanisms for the mutual benefit of all Parties is a key element of Norwegian climate
policy. Cooperative efforts under mutually beneficial incentive structures may provide promising
opportunities for reinforcing environment and development objectives. Specifically, the report on climate
policy to the Parliament in 1995 concludes that Activities Implemented Jointly (AIJ) will be given priority
as an important supplement to measures implemented domestically. To this end, a Governmental Climate Change
Fund, established in 1991 and since then replenished on an annual basis, includes provisions for funding
AIJ pilot projects and related methodological work. This fund is established separate from and in addition
to the development assistance accounts.

The overriding objective for all Pilot Phase activities is to contribute to the assessment of the possible
global benefits and national economic, social and environmental impacts associated with Activities
Implemented Jointly. The Norwegian programme, constituting workshops with interested host countries and
pilot projects on a bilateral and multilateral basis, aims to catalyze opportunities for broad
participation among interested Parties and relevant actors with the view to maximizing learning value. In
addition to the Governmental fund, private sector involvement in pilot projects may provide further
financial and technological resources and practical experience and potentially enlarge the leverage effect
of the mechanism of AIJ.

Currently, projects under the AIJ pilot phase are being implemented with Costa Rica, Mexico and Poland.
Early 1997, a regional workshop was held in Ouagadougou, Burkina Faso and an MoU for carrying out an AIJ
project with Burkina Faso signed. Further projects and regional workshops are under development/preparation
for consideration and scheduling in 1997/98.
The Norway-Costa Rica (Reforestation and Forest Conservation) AIJ Project is being implemented on a
bilateral basis through a cofinancing agreement whereby Norwegian private sector and Governmental funds
enable private landholders to manage their lands in consistency with the objectives of the established
Costa Rican Forestry Law. The AIJ projects in Mexico (ILUMEX Efficient Light Bulbs), Poland (Coal-to-Gas
Conversion) and Burkina Faso (Land Use/Traditional Energy Management) are being carried out under a
Norway-World Bank collaborative programme. The Norway-World Bank programme is established with the view to
facilitate participation among interested parties and to examine practical and workable solutions to
further operationalizing the AIJ pilot phase criteria. The scope of AIJ as a mechanism for stimulating
additional resource flows for the protection of the global climate is explored.

Stepwise procedure for project assessment and approval:
1. Individual project proposals are subject to expert reviews and assessed on the basis of the objectives
and criteria contained in decision 5/CP.1. Consistency with these objectives and criteria constitutes the
eligibility criteria for all projects.
2. Project proposals that are consistent with the objectives and criteria contained in decision 5/CP.1, and
require funding in a range which corresponds to the AIJ-funding available, are then reviewed in a broader
perspective. Due to the limited size of funding available under the pilot phase, not all projects
fulfilling the eligibility criteria can be approved. Portfolio considerations in order to maximize learning
value during the pilot phase, thus constitute a decisive factor. The project portfolio is developed with
the view to secure a diversified representation in terms of project type (e.g. sectors and technology
involved) and geographical regions, both within Annex I and in non-Annex I countries. In addition, private
sector participation in order to leverage technology transfer and financing is given high priority.
3. Eligible projects that match with the project portfolio are then presented to an AIJ Project Approval
Committee established under the Interministerial Steering Committee for climate change issues. The AIJ
Project Approval Committee consists of representatives of the Ministries of Finance, Petroleum and Energy,
Environment and Foreign Affairs. Projects approved by the AIJ Project Approval Committee are, subject to
comments provided by its members, ready for final negotiation and agreement between the host country and
the Ministry of Foreign Affairs.
4. The Ministry of Foreign Affairs, as the Governmental authority responsible for commiting financial
resources for AIJ projects and approval of AIJ project agreements and reports, will on the basis of the
mandate given by the AIJ project approval committee work with host country authorities to finalize a
project agreement.

3. B) List all criteria for national acceptance of an activity implemented jointly:3.B.a)
Criteria that support decision 5/CP.1:

Criterion for project portfolio: Securing a broad representation of different types of
projects and geographical representation, recognizing that decision 5/CP.1 emphasizes that activities
implemented jointly could be conducted in a comprehensive manner covering all relevant sources, sinks
and reservoirs of GHGs, on a voluntary basis, with all Parties that so request.

Individual projects must clearly demonstrate that all objectives and criteria contained in
decision 5/CP.1 are met, including that funding must be additional to ODA and GEF contributions, that
projects must transcend a business-as-usual scenario and provide additional benefits for the
mitigation of climate change, that projects must be supportive of national environment and
development priorities and strategies and receive host country approval.

3.B.b) Other criteria for national acceptance of AIJ:

Criterion for project portfolio: Maintaining a proper balance between projects executed on a
bilateral basis and a multilateral basis. The reason for this approach is to acquire
experience with various ways of executing Activities Implemented Jointly and assess their respective
pros and cons.

Existing institutional capacity in host country is viewed to be an assett, but does not
constitute an eligibility criterion per se.

Private sector participation in order to leverage technology transfer and financing is given
priority as an add-on to the funding provided over the Governmental Climate Change Fund established
separate from and in addition to the development assistance accounts. It is, however, not an
eligibility criteria per se. Recognizing that there are no credits under the pilot phase, private
sector are not granted exemptions or refunds of the Norwegian CO2-tax or other national mechanisms or
policies for participating in AIJ projects.

In conjunction with the signing of the Burkina Faso-Norway project, a regional workshop was held in
Ouagadougou in February 1997. Reference is made to the Report of the African Regional Workshop on
Activities Implemented Jointly under the UN Framework Convention on Climate Change. Further similar
regional workshops are scheduled for 1997 in conjunction with projects under preparation.

The Government of Norway has during the Pilot Phase contributed financial resources to, and participated
in, a number of international AIJ conferences, seminars and workshops, as well as studies related to
methodological issues.